Corporate Law: UBS rogue trader Kweku Adoboli charged with fraud

Corporate Law: UBS rogue trader Kweku Adoboli charged with fraud

Kweku Adoboli, the UBS trader who recently cost the Swiss bank over $2 billion through fraudulent trading, was today (21 October) committed to crown court.

He faces two counts of fraud and two counts of false accounting carried out during his three years at UBS.

Mr Adoboli was remanded in custody and is due to appear at Southwark Crown Court, the court which specialises in financial criminal cases, on 22 November for a plea and case management hearing.

Mr Adoboli, a graduate of the University of Nottingham, carried out his fraudulent trading by speculating on the EuroStoxx, DAX and S&P 500 indexes. He took advantage of ETF transactions, in which payments for a trade are received before a transaction has been confirmed, in order to disguise the risk of his trades.

While the cash payment may not actually be retrieved during the transaction, the money may be written in the seller’s books, the seller can then use this in future transactions, essentially buying with money they don’t have. This ‘fails-to-deliver’ trade can in turn be used in a ‘carousel’ of other trades.

The charge against Mr Adoboli reads: “Between May 31 2011 and September 17 2011, committed fraud, in that whilst occupying a position of trust, namely that of senior trader with Global Synthetic Equities, in which you were expected to safeguard, or not to act against, the financial interests of UBS Bank, you dishonestly abused that position, by causing losses to UBS Bank, calculated at 2.3 billion US dollars, intending thereby to make a gain for yourself or cause losses to UBS Bank, or to expose the bank to risk of loss.”

His lawyer Patrick Gibbs said that Mr Adoboli is “sorry beyond words for what had happened.”

He added: “He stands now appalled at the scale of the consequences of his disastrous miscalculations.”

Related links:
Read more on the story (The Independent)
Read about fraud (FindLaw)
Find local specialist solicitors throughout the UK (FindLaw)

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